One of the most striking features of the pandemic is the role insurance has played in our lives. Whether it’s protecting one’s income for the benefit of surviving family members or having risk coverage to deal with hospital bills, the importance of insurance has increased in 2020. So it’s extremely important to review your insurance needs and fill any gaps as soon as possible. .
“The purpose of insurance is to protect against unforeseen risks. While life insurance is meant to provide financial assistance in the event of the premature death of the breadwinner in a family, health insurance helps cover medical expenses in the event of hospitalization. So it is always better to leave nothing to chance and look at insurance needs at the beginning of the year itself,” said Sanjiv Bajaj, Co-Chairman and Managing Director of Bajaj Capital.
Several factors influence the need for an insurance plan at different stages of life. Here are some important reasons why one should review their health or life insurance plan:
To ensure the sufficiency of coverage
Insurance only works to your advantage when the coverage is sufficient to handle your losses. “If rising medical costs are any indication, you need a high sum insured in your health insurance plan. Even your life insurance policy should have good coverage so that your family is safe in your absence. It is therefore necessary to review your existing insurance plans to ensure that you have sufficient coverage,” said Dhirendra Mahyavanshi, co-founder of Turtlemint, an InsurTech company.
For example, as the age of an individual or the number of family members increases, it becomes necessary to have a better health insurance plan with higher coverage that would easily suffice the medical needs of the individual. individual and family. This is an important step where an individual should consider re-checking the current insurance portfolio and further identifying the needs of the family and future needs. In addition, the increase in expenses requires an increase in the life insurance portfolio, which again means the need for review.
Ongoing lifestyle changes
“It has been observed that a gradual change in the health and life insurance needs of an individual also depends on the evolution of his lifestyle. Consideration of both health and life insurance plan would help the individual to be financially equipped in case of medical emergency or any life event,” said Rakesh Goyal, Director of Probus Insurance , Insurtech Broking Company. “It would also eventually help the individual enjoy the benefits of a good lifestyle without worrying about being sufficiently insured,” he added.
Income Level Changes
Any change in income, i.e. increase or decrease, is a factor that would affect the need to review your insurance plan.
In the event of an increase in your current salary, opting for an insurance plan with a higher face amount could be advantageous because it will provide you with greater coverage and greater financial security in the event of an emergency. On the other hand, a pay cut or lower salary also calls for a revision of the plan because it makes more sense to opt for a lower sum assured than to buy out the contract (due to non-payment).
Bajaj said: “If you are considering buying a house or changing jobs, you should immediately review your insurance requirements. Life changes fast and in the blink of an eye, it’s a new moment to deal with. Even if planned earlier, major purchases often take shape on a whim. As life progresses, new liabilities come to the fore and must be dealt with responsibly.
To opt for the benefits of new age coverage
Life and health insurance plans have evolved over time. Mahyavanshi said, “New Age coverage benefits have become mainstream, such as lifetime coverage, international coverage, modern treatment coverage, etc. So it’s time to check if your existing plans offer these New Age coverage benefits. If they don’t, it’s time to mix things up and implement plans to deliver such benefits.
Align your financial goals
Certain phases of life such as bringing up children or getting married, buying an asset such as a house, car, land, etc., planning for retirement, finding travel plans after retirement, etc. may require a review of your health and life insurance plan. Here, it becomes imperative to understand which plan would work best for you according to your plans.
For example, “Raising children and providing them with the best you can is really important and having a proper insurance plan during such an event is extremely important. One needs to review his current health insurance plan to ensure that the sum insured is sufficient to meet the medical needs of the child,” Goyal said. “Also, having a good life insurance plan would help raise your child comfortably without stress during inflationary times or without increasing the cost of basic needs,” he said.
In the end, people usually see buying insurance as their ultimate goal. However, it is necessary to review the plan timely as it helps to understand whether the purchased plan is working for them or not. (Courtesy: https://www.livemint.com/)